Entrepreneurship small business
Number of Black Women-Owned Businesses Increased 258 Percent in 16 Years8/19/2014
by Jazell Hunt for NNPA From the rubble of the Great Recession, women business owners are emerging...
by Jazell Hunt for NNPA
From the rubble of the Great Recession, women business owners are emerging victorious with record growth and economic impact. Even so, women entrepreneurs still face barriers to success.
Today, 30 percent of all American businesses have a woman at the helm. African-American women in particular are a driving force, establishing their enterprises at six times the national average, according to a 2013 American Express OPEN report. Between 1997 and 2013, African-American women-owned businesses grew by 258 percent and made $226.8 billion in revenue. They employ 1.4 million people, which is more than the combined population of Atlanta, St. Louis and Miami.
Another study from the Global Initiative for Women’s Entrepreneurial Research found that by 2009, women-owned businesses supplied 23 million jobs – or 16 percent of all jobs available at the time – with an economic impact of $3 trillion. In terms of job growth, women owned businesses rank second only to publicly traded companies.
But available data suggests there is much more unearthed potential.
“While women-owned businesses are the fastest-growing segment of businesses, and many succeed, women must overcome barriers that their male competitors do not face,” a report from the U.S. Senate Committee on Small Business and Entrepreneurship state. The committee held a hearing recently at which it released the report and discuss its findings. “In the area of capital, studies find that women do not get sufficient access to loans and venture capital.”
In 2002, Karen Lawrence was laid off in the post-9/11 recession. Tired of fighting to get back into the corporate world, she channeled her event management skills into a startup. Using her savings and severance package, she launched It’s My Affair, LLC.
“It wasn’t enough. But I started small,” Lawrence says. “Getting people to take you seriously as a business owner, especially when you’re small, is the hardest part.”
Despite excelling with the opportunities given, women entrepreneurs still face obstacles echoing from decades of codified sexism. Chief among these obstacles is access to capital. For example, a study from the Ewing Marion Kaufman Foundation found that women receive 80 percent less capital than men for first-year financing.
The Senate committee report also points out that women-owned small businesses (WOSBs) represent 30 percent of all small businesses, but only 17 percent of U.S. Small Business Administration loans went to women entrepreneurs. And this may be their best opportunity to access funds; the SBA says women are three to five times more likely to be approved for an SBA loan than for a conventional loan.
Government contracts offer another example of WOSBs’ restricted access to lucrative opportunities.
Federal contracting opportunities amount to approximately $500 billion worth of business. Sometimes, small businesses are able to get a shot at this money by providing services to government agencies through sole source authority. This authority lets federal entities bypass the bidding or application process and award contracts that pay up to $6.5 million for manufacturing, or $4 million for other industries, to one business. Currently, 15 percent of small business awards are granted to disadvantaged businesses using this authority.
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